JAYRAJ VASANT PARLEKAR,MUMBAI vs. ITO 26(2)(1), MUMBAI

Facts of the case are that the assessee filed his return of income on 16.9.2009 declaring a total income of Rs.1,43,220/-. The case was selected for scrutiny and the statutory notices under section 143(2) and 142(1) of the 2 Income Tax act, 1961 were issued and served upon the assessee. During the course of assessment proceedings, the AO on the basis of AIR information found that the assessee has not offered to tax the Long Term Capital Gains on the transfer of immovable property and the value of the same as appearing in the AIR information was Rs.31,08,651/-. During the course of assessment proceeding, the assessee filed a copy of sale deed which he claimed to be ignorant and not knowing. The assessee also submitted that he never executed any sale deed on 1.12.2008 however it is evident from the sale deed that the assessee has sold the tenement No.606, 6th floor, Omkar Co-operative Housing Society, Grant Road (W), Mumbai-400007 admeasuring to 225 sq.ft. to Mrs. Sayali Satish Sawant for a total consideration of Rs.10 lakhs. The AO adopted the value of the said flat as per Stamp Valuation Authority at Rs.31,08,651/- in order to calculate capital gain on the said property. The assessee during the course of assessment proceedings submitted that the said property was inherited property and the same was devolved to me from his mother who died in the year 1974. The assessee submitted that he was threatened to sign documents qua the tenement to Mrs. Sayali Satish Sawant without any consideration of whatever nature and till that date he has not received any money at all. According to the AO there was a receipt/acknowledgement attached with the sale deed which stated that the assessee has received Rs.10 laksh as full and final consideration on transfer of the said property. In order to 3 corroborate the AO vide order-sheet noting dated 17.10.2011, the assessee was asked to produce Mrs. Sayali S Sawant to know the truth behind the said transfer. However, the assessee stated that he could not found Mrs. Sayali S Sawant and could not file any confirmation as desired by the AO. Ultimately , the assessee submitted before the AO that he did not receive any money which could be verified from the bank account and therefore the gain on said transaction was no liable to capital gain tax in his hand. However, the AO disbelieved and rejected the submissions of the assessee and calculated the capital gain at Rs.30.36,193/- and added the same to the total income of the assessee. In appellate proceedings, the ld.FAA also confirmed the action of the AO and dismissed the appeal of the assessee by observing and holding as under : ―6. I have considered the facts of the case, I am of the considered opinion that the property had actually been transferred by the assessee in terms of sale deed date 1.12.2008 and has been registered by the Sub-